At the "Press Start" screen, press Square, Circle, X, Square, Circle, Square, X, Circle, X, Square, Circle, X. If you entered the code correctly, Rau will say "Faahu". Enter the "Cheats" section at the Sage, and the last card will be Invincible Rau. Press X to activate the code.

After you win the 1st level, you will be able to visit the Sage. He'll be on the 2nd level of the inn. Once he's there, you can visit him at any time to replay levels you've completed, or see "Rewards" you've unlocked along the way.